The Nation · Foreign aid · Bilateral
Republic of India
भारत
Longest-running bilateral partner. Power, petroleum and connectivity define the modern relationship.
Active portfolio
USD 1.5B
as of 2024-12-31
Latest annual
—
Modality
Loans + grants
since 1951
Sectors funded
6
active areas
How the relationship works
India has been Nepal's most continuously engaged bilateral partner since the 1950 Treaty of Peace and Friendship. India EXIM Bank lines of credit (LoCs) and the Government of India grants together exceed USD 1.5 billion in active commitments. Recent flagship deliverables include the Motihari-Amlekhgunj cross-border petroleum pipeline (commissioned 2019), 132/220kV cross-border transmission lines enabling power export to India, and ongoing road connectivity (Postal Highway, Madhya-Pahadi). Power trade has shifted from net import to net export in surplus monsoon months — a structural change for Nepal's energy economics.
The short version
India is Nepal's oldest and largest neighbouring partner. It funds roads, power lines, pipelines, and health projects — and now buys Nepal's surplus electricity in the rainy season.
Sectors funded
Notable projects
Motihari–Amlekhgunj petroleum pipeline
2019
Cross-border transmission lines (Dhalkebar–Muzaffarpur, etc.)
ongoing
Postal Highway (Hulaki Marg) sections
ongoing
Pancheshwar Multipurpose (in negotiation since 1996)
pending
What to watch
- ·Power export agreement — long-term commitment from India for Nepali hydro export is the single biggest economic lever in the relationship.
- ·Pancheshwar — 30 years of negotiation and still no Detailed Project Report agreed.
- ·EPG (Eminent Persons Group) report on bilateral relations remains unreceived by the Indian PM since 2018.
Sources · cited verbatim
Ministry of External Affairs (India) — India–Nepal Bilateral Brief
Open release checked 2024-06-30Ministry of Finance Nepal — Public Debt Bulletin — bilateral creditors (India EXIM lines of credit)
Open release checked 2025-01-15
More bilateral donors
Active
Japan (JICA)
Long-term, deeply concessional partner — quietly the most consistent bilateral donor.
Scaling up
People's Republic of China
Strategically scaling. Pokhara airport loan and BRI MoU define the current arc.
Suspended
United States (USAID)
Major bilateral grant donor for 70+ years — programmes suspended February 2025.